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The Private Limited Company in Thailand
The most suitable form of the establishment of a company in Thailand is a private limited company. This way of the company’s foundation is elementary and the company can advance different means. This is a company that has a limited liability. The company’s share of up is divided into amounts and owned by not fewer third parties. This form of the company is used by a foreign company due to the fact that a foreign company shall not own more than 49% of the shares or a special permit shall be granted and shall be liable to the amount paid.
Table of Contents
What is a private limited company ?
This structure’s name also reveals the essence of its definition: private limited company. This legal person created by at least three shareholders allows them to limit their possible loss to the size of their capital contribution. It is the most common form for setting up a company in Thailand. The uniqueness of this structure, as mentioned before, is its founders. The entry of shareholders into a limited company is also characterized by significant freedom. Private limited company shareholder may be a natural or legal person. Becoming a shareholder is not subject to age or capable person’s ability restriction. For example, a minor can also be a shareholder in principle. A foreigner who is not a resident of Thailand can also become a shareholder up to 49% of the maximum share or, in special permission, up to 100% of the shares.
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What are the regulations ?
The seven critical points to keep in mind about private limited companies in Thailand are as follows:
- The company registration in Thailand shares the same name as registered under the “Company Limited” or “Co., Ltd.” under the Civil and Commercial code in Thailand, and the Ministry of Commerce.
- Shareholders and directors obligations consists of minimum of three shareholders and a minimum of one director. Stockholders can be either natural persons or legal entities and foreign nationals or Thai. However, the director must at least be 50 % share of the Thai nationality.
- Minimum capital requirements imply no specific amount of capital required to start a private limited company.
- The capital is under the entrepreneur’s purview and often embodied/failed to Memorandum of Association while some businesses have restricted to enter or have minimum investment requirements.
- Liability is embodied to the maximum of their unpaid shares and personal assets are protected from company debts and liabilities.
- Business activities in Thailand can be some on some restrictions and licensing depending on specific laws or regulations embarking on the sector.
- Taxation on corporate income tax does not include other impositions such as the value-added tax, specific corporate tax, and withholding tax. A substantive entity of data that shall be accessible by the public Compliances and reporting maintain fulfilled annual financial statements, and an annual general meeting record keeping and other obligations .
The information documented above is provided for general knowledge, if necessary, referring to the Department of Client Development and Board of Investment, is paramount in solving the issue.
Why set up a Private Limited Company ?
How does the Board of Directors work ?
The board of directors should manage the company and make important decisions. In some cases, investors should memorize from the beginning. Suppose a wish to retain control of the company. In that case, some shareholders become directors or appoint the post according to trusty; the law list contains only any points about director powers.
Therefore, the directors shall change pursuant to the shareholder meeting entrance. However, it is necessary as a vital question, and all shareholders should think about the place of directors, as the number appointed by the shareholders to act on behalf will be an issue for some shareholders. The initial agreement shall enter, shareholders’ agreement below, to protect the direct right. Furthermore, the Directors’ Board approves various-activity decisions.
However, the board of directors generally adopts the majority. Unless stated otherwise in the articles of incorporation. The decision of the majority of the directors includes the position of the chairman. In a tie, the chairman makes a decision. All directors must appear in person. No proxies shall assign. However, the law shall appoint individuals. Business directors do not perform their duties. A manager or officer shall play a role in business work. Especially the company employs numerous earners or staff.